NHS mileage allowance

Eligible staff can claim for all work-related travel, except the commute between home and work.

With the recent dramatic rise in fuel costs, we’re calling on NHS employers to provide more financial support for nursing and midwifery staff who drive or use public transport for work.

Here are some frequently asked questions.

The HMRC rate of reimbursement is:

• 45 pence per mile up to 10,000 miles and
• 25 pence per mile for miles travelled while undertaking your contractual duties.  

The national guidance for staff on Agenda for Change terms in England is 59 pence per mile for the first 3,500 miles and 24 pence per mile thereafter. 

However, trusts and organisations can locally agree a different rate. Many follow the national guideline but some trusts pay less. Read more on the NHS website.

Through local negotiations, some trusts and organisations have increased the rates they are paying staff. 

The mileage you can claim will depend on your contractual work base. This is normally specified in your contract of employment. You can claim for mileage you need to undertake to do your job. However, you can’t claim for home to work mileage unless your contractual work base is your home.

The NHS Staff Council calculate the mileage allowance by considering the changing cost of motoring, including fuel costs. The allowance may not cover all the costs of driving for work, but it is intended to be a meaningful contribution towards it.

The NHS Staff Council review mileage rates twice yearly in April/May and November/December, using the latest data provided by the AA. Any changes are implemented in January or July. Local negotiation can take place at any time.

We and other trade unions have been working with NHS employer and health department representatives on the NHS Staff Council to address the stark increase in motoring costs. The Staff Council were not able to reach agreement on making changes to the NHS mileage allowance at the current time. The employer representatives indicated that there is no prospect of central funding or a mandate to support a nationally negotiated solution in England.

Under NHS (Agenda for Change) terms, NHS employers can adjust the rates they pay staff for mileage. Therefore, local discussions are required between local staff and managers to ensure staff are being adequately reimbursed for the cost of carrying out their duties. 

Speak to your local RCN representative about what action is being taken locally on this issue.

You may be able to claim Mileage Allowance Relief (MAR).

Raise your concerns with your manager as soon as possible. If they don’t offer a solution, contact your local RCN representative or call RCN Direct on 0345 772 6100.

Your employer may offer you a lease car instead of adequate reimbursement for work-related travel. This is not always a better option. Lease car agreements can work out to be expensive. You will need to check the agreement you are offered very carefully. Some lease car companies have been created as subsidiaries of the employer, so the trust has a vested interest.

Lease cars will have an impact on the tax you pay and on your pension contributions. Please seek advice before entering into an agreement. If you are offered a lease car, you have the right to say no.

Fuel cards are a great way for staff to pay for fuel while using pool cars (shared vehicles owned, maintained and kept by the employer for use by staff in the course of their duties).

However, fuel cards do not cover the full cost of motoring, for example wear and tear and maintenance. There is also a tax implication if using a fuel card for fuel for a lease or personal vehicle. Careful consideration should be given to the terms and conditions of any agreement on the use of fuel cards.

Some employers have stated that they cannot pay the national Agenda for Change mileage rate because they would have to process P11Ds for staff to calculate tax on the additional income. They say this would cost too much or take too much time. However, here at the RCN, we believe this should not stop our members from being properly reimbursed for their expenses.

HMRC set the thresholds for mileage and other expense rates. If an employer pays up to the threshold, no additional tax is due to be paid. However, tax will need to be paid for any expenses paid over the rate set by HMRC here.

Section 17 of the NHS Terms and Conditions booklet sets out mileage rates that trusts can use to reimburse work mileage. These rates can be found here.

NHS Terms and Conditions set a rate of 59 pence per mile (for the first 3,500 miles per year). This is above the tax threshold set by HMRC. Therefore, only the excess amount of 14 pence per mile is subject to tax. If your employer uses payroll to pay your expenses, the P11D is not required.  Your payroll can simply calculate the extra pence per mile as income and calculate your tax or National Insurance on a single amount of your salary, plus the mileage.

For example, if your gross salary is £2,500 per month, and you also claimed 500 work miles in the month, your pay slip would show your gross salary of £2,500 and your mileage payment of £295 (500 miles at 59 pence per mile). You would pay tax and national insurance on your salary and £70 of the mileage payment. This would not require the P11D.

If your employer pays your expenses separately from payroll, then a P11D is required to ensure you only pay the correct amount of tax, and that your employer also pays the correct National Insurance contributions. While this is an extra process, it is automated by many payroll systems. Many NHS and other employers manage to process these payments to employees every month. 

If your employer is using this as a barrier to increasing mileage rates, please contact us for support.